President Cyril Ramaphosa reminded his American and Continental African guests that they are visiting the country of the World Rugby Champions as he did in 2019 at the South Africa Investment Conference after Amabokoboko won the World Cup in Yokohama in Japan and the rand similarly rallied against the greenback and sterling, says the writer. Picture: Itumeleng English/Independent Newspapers
The 20th Africa Growth Opportunity Act (Agoa) Forum convened by US President Joe Biden is taking place at Nasrec in Johannesburg amid a curious mix of national euphoria and continental angst.
No doubt Ramaphosa reminded his American and Continental African guests that they are visiting the country of the World Rugby Champions as he did in 2019 at the South Africa Investment Conference after Amabokoboko won the World Cup in Yokohama in Japan and the rand similarly rallied against the greenback and sterling.
And they say that sports and politics don’t mix.
The Springboks’ resilience, on and off the field, seems to be matched by American resolve in its trade and investment playbook with the 35 Agoa accession countries.
Two days before the Agoa Forum, Biden wrote to the leaders of the US Congress and Senate informing them of his intention to expel the Central African Republic, Gabon, Niger and Uganda from accession to Agoa, effective January 1.
The first three are for their failure towards acceptable progress towards political pluralism, rule of law and respect for human rights. In the case of Uganda, it is because of its adoption of a law banning gay sex and rights.
While Agoa is despised by radical groups in general across the continent, because of a perceived neo-colonial relationship in which Washington is imposing its financial and economic clout to extract political favours from African states- such as calling Russia’s conflict with Ukraine and invasion and occupation - Agoa countries, especially South Africa, are clamouring for an extension/renewal of the act beyond 2025, when it expires.
Newbie countries such as Ethiopia, Somalia and several others are keen to join, while on Tuesday Biden decided to reinstate Agoa trade preference programme benefits for Mauritania.
To twist the immortal words of one of Biden’s presidential predecessors, as far as Agoa is concerned it’s “Eligibility,
Eligibility, Eligibility, Stupid”. Never mind the fact that any extension to Agoa has to be approved by a vote in Congress, which currently has a Republican majority and a staunchly Trumpian Speaker in Mike Johnson.
Lest supporters and opponents of Agoa get lost in translation, the US is managing Agoa from a position of strength.
It is as if Washington considers Agoa a lost leader.
Since its inception in May 2000, the trade balance between Agoa countries and the US has always been in favour of the African states, peaking at $64bn in 2008 and on an upward trajectory once again at $13.5bn last year.
In addition, the prime attraction is that Agoa provides eligible SSA (Sub-Saharan African) countries with duty-free access to the US market for over 1 800 products, in addition to over 5 000 products that are eligible for duty-free access under the World Trade Organization’s Generalised System of Preferences Programme.
This has a direct effect on trade receipts. job creation and private FDI (foreign direct investment) inflows.
Nevertheless, after 25 years of the act, what does Africa want from Agoa and what may it get? Short of a miracle beyond American resolve, Agoa 2023 is unlikely to emulate our boys in green and gold as history-makers.
At a pre-Agoa briefing in Johannesburg on Monday, US officials were at pains to stress that African countries have failed to take full advantage of Agoa’s preferential trade terms.
Any push-back by Agoa states to make the terms more “user-friendly”, to extend the duty-free products list and eligible companies to include medium and large size entities, is fraught with political risks and beholden to the outcome of the US presidential election in November next year and any decision by Congress on Agoa’s extension.
There is talk about extending the term of Agoa by a decade. This could be succour to the US Congress given that such an extension would give US investors and companies comfort and certainty about trading with and investing in African partner states.
But this depends on whether business will trump ideology.
SA’s Minister of International Relations and Co-operation, Naledi Pandor, in a recent address to a trade union meeting, precisely alluded to the inalienable sovereignty and rights of African and developing countries to decide for themselves in matters of foreign policy, global trade and investment unencumbered by political or economic pressure and hegemony from the West or any other bloc.
Parker is an economist and writer based in London
Cape Times
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